Contactless, tech-driven shopping to drive India’s retail segment post COVID-19

Retailers gearing up for complete transformation of businesses in India: RAI

Retail markets in urban centres may face acute labour shortage as people have migrated to their towns and villages in the wake of COVID-19 pandemic | AFP Retail markets in urban centres may face acute labour shortage as people have migrated to their towns and villages in the wake of COVID-19 pandemic | AFP

As stores reopen, the retail segment in India is expected to witness significant changes post the Covid-19 era in the new normal world. A recent webinar by the Retailers Association of India (RAI), themed around reopening of stores in the post-lockdown period, elucidated on the new changes that the Indian retail will undergo in the near future. 

Contactless shopping is expected to be the new trend with Indian consumers avoiding crowded stores and preferring low exposure. It is also expected that the hygiene level of stores will be the key differentiator for customers. Indian consumers are also expected to spend less money, but more than usual on essential products. Indian retail may have to brace itself for less shopping trips by Indian consumers post the lockdown, but these trips will have more planned purchases instead of impulsive buying. Under these circumstances, stocking of products may become a new habit. 

The RAI expects these changes in consumer behaviour to bring about a drastic change in India's retail industry. It is expected that as part of the new normal, high-velocity products are going to be stored in greater quantity by retailers and more unique brand partnerships are expected to emerge in the times to come. It is also expected that mass media marketing is going to go down and established brands will be reinforced and get a consumption boost from this crisis. Even many new technological changes on part of the retailers are expected such as widespread use of technologies such as magic mirrors that support touchless shopping. 

Many brands are already trying to bring in changes. For instance, take the case of Fiat Chrysler Automobiles (FCA) India that has announced the launch of its contactless customer experience, in response to continued movement restrictions and social distancing. Under this, the Jeep retail experience is 'touch-free' for Indian customers. They have introduced a digital module named ‘Book My Jeep’, under which prospective customers can now book and own a Jeep without having to physically visit a showroom, and can have a test drive and sanitised vehicle delivery at their doorstep. 

Customers planning to book a Jeep will be guided by automated prompts through three steps on the company's booking website. They will need to submit simple details such as their contact information, geographical location, choice of variant, colour, powertrain and transmission. The system will collate the inputs and send a summary to the customer for a reconfirmation, after which the customer can proceed to paying the booking amount via credit card, internet banking or other available online payment options. 

On submission, FCA’s automated retail architecture will automatically create a unique ID and link the customer’s information to its authorised dealer in that city. A Jeep expert from the dealership will then contact the customer via a video or voice call and assist the customer in case any clarification or details are required. Post this a test drive, in a fully sanitised vehicle, will be arranged at the customer’s doorstep. The customer can then proceed using the same module to complete the booking process and go for the final payment online. 

However, the current state of the Indian retail seems to be under tremendous stress due to the pandemic. The Confederation of All India Traders ( CAIT) estimates that ever since the lockdown was imposed, the Indian retail sector lost a gigantic sum of around Rs 5.50 lakh crore. CAIT estimates that this may continue in the future and it may witness at least 20 per cent of Indian retailers collapse and wind up their businesses in the next few months. 

“Indian retailers do a daily business of around Rs 15,000 crore and that means a loss of over Rs 5.50 lakh crore of business which is done by 7 crore traders of India. Out of these 7 crore traders, around 1.5 crore traders will have to permanently down their shutters in a few months and a further 75 lakh traders who are dependent on these 1.5 crore traders will fold up in the medium term. At least 2.5 crore traders in India are micro and small in nature who do not have deep pockets to sustain this severe economic catastrophe. On the one hand, they have to pay salaries, rentals, other monthly expenses and on the other hand, they will have to deal with a sharp dip in disposable income of consumers along with strict social distancing norms that will not allow business to return to normalcy for at least 6-9 months,” said Praveen Khandelwal, the Secretary General of CAIT.